PORTLAND — A Cape Elizabeth psychologist was sentenced Tuesday in U.S. District Court to eight months in federal prison for fraudulently billing insurance companies for nearly $70,000 in services.

Carole Orem-Hough, 55, also was sentenced to three years of supervised release and ordered to pay more than $69,000 to four insurance companies, according to court records. U.S. District Judge George Singal ordered her to begin serving her prison term Dec. 23. She remains free on bail until then.

She waived indictment in May and pleaded guilty to one count of health care fraud.

Orem-Hough, who did business as Casco Bay Psychotherapy in South Portland, began the fraud in September 2008 after she became frustrated with red tape involved in dealing with insurance companies, according to court documents. She came to the attention of investigators in 2011 after she admitted to a patient she was billing the patient’s insurance company, Aetna, for two sessions a week rather than one.

“Later in September (2011) during a telephone conversation, the Aetna patient told the defendant that what the defendant was doing was stealing because she made a promise to Aetna to accept Aetna’s billing rates,” the prosecution version of events to which Orem-Hough pleaded guilty said. “The patient further stated that when she told the defendant that double billing was ‘stealing,’ the defendant responded that it was ‘just insurance’ and that there was no harm to the patient because the defendant did not charge her a co-payment for those dates.”

Orem-Hough stopped submitting false bills shortly after that conversation took place, the prosecution version of events said.

Frustration over the “red-tape and what she considered to be unfair practices of the insurance companies” was one of the factors that caused Orem-Hough to submit fraudulent bills, her attorney, George “Toby” Dilworth, wrote in his sentencing memorandum.

“The constant frustrations took their toll on Carole, and she began to, in her mind, ‘get even,'” he said. “Instead of arguing with carriers about a claim, she would bill for appointments which never occurred or which the patient had missed. On other occasions, she entered a code for two shorter sessions rather than the longer session that she provided.”

Orem-Hough’s therapist, Dr. Julia Forbes, who was quoted in the sentencing memorandum, said her client faces challenges that included “a truly emotionally damaged and violent child, a vicious ex-husband, being a single mother, her own lack of resources, both physically and financially as well as emotionally to meet the demand of extraordinary protracted stresses for many years.”

Forbes also said that Orem-Hough now is thinking more clearly and that she and her son “are on the road to healing.”

Orem-Hough faced up to 10 years in prison and a fine of up to $250,000. Under the prevailing federal sentencing guidelines, she faced between 10 and 16 months behind bars, according to federal prosecutors.

Assistant U.S. Attorney James W. Chapman Jr. recommended Orem-Hough be incarcerated for a year and a day. Dilworth recommend house arrest and probation.

Orem-Hough surrendered her license to practice earlier this year, according to Dilworth’s sentencing memorandum.

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